The Union Cabinet, co-ordinated by Prime Minister Narendra Modi, has granted approval for the extension of the Scheme for Rebate of State and Central Taxes and Levies (RSCTL) for the export of apparel, garments, and made-ups until 31st March, 2026. This two-year extension aims to establish a consistent policy framework crucial for strategic trade planning, particularly in the textiles sector, known for advanced order placements and long-term deliveries.
The continuity of Rebate of State and Central Taxes and Levies is expected to bring about predictability and stability in the policy landscape, alleviating the tax and levy burden and fostering a fair competition principle of Goods are exported and not domestic taxes. Initially approved until 31st March, 2020, with subsequent extensions until 31st March, 2024 this latest extension until 31st March, 2026 enhances the export competitiveness of the garments and made-ups sectors.
It promotes cost-competitiveness in apparel and made-up products and aligns with the zero-rated export principle. Other textile products, excluding those in Chapters 61, 62, and 63, not covered by RSCTL, can benefit from the Remission of Duties and Taxes on Exported Products (RDTEP) along with other products. Rebates for State Taxes and Levies cover various components such as VAT on transportation fuel, captive power, agricultural sector, market tax, electricity duty, stamp duty on export documents, and embedded State Goods and Services Tax.
